182, 120 or Zero Days: When an NRI Becomes a Tax Resident of India
Most NRIs know the 182-day rule. Far fewer know that a family visit of 130 days, or no visit at all, can still make them resident in India for tax.
The trigger is usually money, not days: a property sale, a large NRO interest credit or rental income that pushes Indian income above ₹15 lakh. Once that happens, a different and much shorter day test applies.
Quick answer: A visiting Indian citizen or person of Indian origin is resident at 182 days. If Indian income exceeds ₹15 lakh, 120 days in the year plus 365 days in the four prior years is enough, and the result is RNOR. An Indian citizen with Indian income above ₹15 lakh who is not taxed anywhere by residence is a deemed resident, whatever the day count.
Contents
Which law applies to which year?
The Income-tax Act, 2025 applies from 1 April 2026. Your status for FY 2025-26 (AY 2026-27) is still decided under section 6 of the 1961 Act. From tax year 2026-27, section 6 of the 2025 Act applies.
The substance did not change. The tests that sat in Explanation 1 and section 6(1A) of the 1961 Act now have their own sub-sections, and "previous year" is now "tax year". This post gives the 2025 Act sub-section with the 1961 provision in brackets.
What are the basic day-count tests?
An individual is resident in India in a tax year if either test is met:
182-day test: in India for 182 days or more in the year [s.6(2)(a); 1961: s.6(1)(a)].
60 + 365 test: in India for 60 days or more in the year and 365 days or more in the four preceding years [s.6(2)(b); 1961: s.6(1)(c)].
If neither is met, the person is non-resident, unless the deemed-residence rule applies. The 60-day limb is where most of the exceptions sit, and where most NRIs go wrong.
Two groups are taken out of the 60-day limb, so only 182 days counts for them:
Leaving India: an Indian citizen who leaves India in the year for employment abroad, or as crew of an Indian ship [s.6(3); 1961: Explanation 1(a)].
Visiting India: an Indian citizen or person of Indian origin who lives outside India and comes on a visit [s.6(4); 1961: Explanation 1(b)].
When does the 120-day rule replace 60 days?
For the visiting group, the relief has a ceiling. If total income other than income from foreign sources exceeds ₹15 lakh, the 60-day limb applies with 120 days in place of 60 [s.6(5); 1961: Explanation 1(b), as amended by the Finance Act, 2020].
"Income from foreign sources" means income that accrues or arises outside India, other than income from a business controlled in India or a profession set up in India. So the ₹15 lakh is essentially your Indian-source taxable income: rent, NRO interest, capital gains on Indian assets, Indian salary or fees.
Exempt income is not part of total income, so it does not count towards the ₹15 lakh. Taxable gains do, and a single sale can cross the line in one year.
Worked example: one property sale changes Anita's status
Anita (illustrative) is an Indian citizen living and taxed in the United States. In tax year 2026-27 she spends 130 days in India caring for her parents. Over the four preceding years she was in India for 410 days.
Indian income: rent ₹6 lakh, NRO interest ₹3 lakh, and a long-term gain of ₹13 lakh on a Pune flat sold in the year. Total ₹22 lakh.
182-day test: 130 days. Not met.
Which limb applies? Indian income exceeds ₹15 lakh, so the 120-day version applies.
120 + 365 test: 130 ≥ 120 and 410 ≥ 365. Met. Anita is resident.
Ordinary residence: a visiting citizen or PIO who is resident only because of the 120-day rule (120 to 181 days, income above ₹15 lakh) is not ordinarily resident [s.6(13)(b); 1961: s.6(6)(c)].
Now remove the sale. Indian income is ₹9 lakh. The 60-day limb does not apply to her at all, only the 182-day test does. With 130 days she is non-resident.
What changes for her? As RNOR, her US salary is still outside Indian tax. But she files as a resident (RNOR), not as a non-resident, and she should check how the status affects the computation and the TDS the buyer applied. The selling-side mechanics are in NRI property sale in 2026: TDS, capital gains and lower deduction.
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What is a deemed resident, and who is caught?
Deemed residence targets Indian citizens who are not tax residents anywhere. Under s.6(7) [1961: s.6(1A)], an individual is deemed resident in India if all three conditions hold:
The individual is a citizen of India (a PIO who is not a citizen is outside this rule).
Total income, other than income from foreign sources, exceeds ₹15 lakh in the tax year.
The individual is not liable to tax in any other country or territory because of domicile, residence or a similar criterion.
Days in India do not matter. The rule does not apply to someone already resident under the day tests [s.6(8)]. A deemed resident is always not ordinarily resident [s.6(13)(c); 1961: s.6(6)(d)].
Example: Vikram (illustrative), an Indian citizen, has moved between countries and is not a tax resident of any of them under their laws. He spends 40 days in India and earns ₹18 lakh of Indian rent and capital gains. He is a deemed resident and RNOR.
When the rule was introduced, the CBDT clarified in a press release dated 2 February 2020 that it is not meant to tax Indian citizens who are bona fide workers abroad on their foreign income. In practice, the key evidence is a Tax Residency Certificate from the country where you live; see Form 41 (formerly Form 10F) and DTAA claims.
Resident but not ordinarily resident: why RNOR matters
Once resident, the next question is whether you are ordinarily resident. You are not ordinarily resident (RNOR) if any of these applies [s.6(13); 1961: s.6(6)]:
Non-resident in nine out of the ten preceding years.
In India for 729 days or less in the seven preceding years.
Resident only through the 120-day rule, with 120 to 181 days in India.
Resident only as a deemed resident.
An RNOR is taxed on Indian income and on foreign income only if it comes from a business controlled in India or a profession set up in India. A resident and ordinarily resident person is taxed on worldwide income and must report foreign assets in Schedule FA.
That is why the difference between "RNOR" and "ROR" is often worth far more than the difference between "NR" and "RNOR". Returning NRIs should plan for it; see the RNOR guide for those returning to India.
How to count days correctly
Count physical presence. Every day you are in India counts, whatever the purpose. The safer practice is to count both the day of arrival and the day of departure.
Use the tax year. Count 1 April to 31 March, not the calendar year your foreign country may use.
Count the four and seven prior years too. The 365-day and 729-day tests look back. A rough memory is not enough.
Build the evidence. Passport stamps, e-arrival records, boarding passes and the travel history available from immigration records. Keep a running spreadsheet, year by year.
Check the income side early. If a sale or large receipt is likely, work out whether Indian income will cross ₹15 lakh before you book a long visit.
Decision checklist before you file
Are you an Indian citizen or a person of Indian origin living abroad? If you left India this year for employment, the leaving rule applies instead.
Total your Indian-source taxable income for the year. Leave out exempt income and income from foreign sources.
If it is ₹15 lakh or less: you are resident only at 182 days or more.
If it is above ₹15 lakh: check 120 days this year and 365 days in the four prior years.
If you are a citizen with Indian income above ₹15 lakh: confirm you are liable to tax by residence somewhere, and hold a TRC.
If resident: test RNOR (9 of 10 years, 729 days in 7 years, the 120-day route, or deemed residence).
Select the matching status in the ITR and keep the working on file. Filing details are in NRI return filing for AY 2026-27.
Common mistakes
Assuming 182 days is the only test. It is only for those whose Indian income stays at or below ₹15 lakh, or who left India for employment that year.
Ignoring the property-sale year. A one-off capital gain can switch on the 120-day rule for that year alone.
Counting exempt income towards ₹15 lakh. It is total income that matters; exempt receipts are not in it.
Forgetting the look-back. 120 days alone does not make you resident; you also need 365 days in the four prior years.
Mixing FEMA and tax status. Your bank may treat you as a person resident outside India under FEMA while the ITR shows RNOR. Both can be right.
Filing as NR when deemed resident. A wrong status can lead to a defective-return notice or a mismatch. See income tax notices to NRIs.
Summary table: 1961 Act and 2025 Act
Rule | Income-tax Act, 1961 | Income-tax Act, 2025 |
|---|---|---|
182-day test | s.6(1)(a) | s.6(2)(a) |
60 + 365 test | s.6(1)(c) | s.6(2)(b) |
Leaving India for employment or as ship crew | Explanation 1(a) to s.6(1) | s.6(3) |
Visiting citizen or PIO: 182 days only | Explanation 1(b) | s.6(4) |
Indian income above ₹15 lakh: 120 days | Explanation 1(b), proviso | s.6(5) |
Deemed resident | s.6(1A) | s.6(7), (8) |
Not ordinarily resident | s.6(6) | s.6(13) |
Year applies to | FY 2025-26 and earlier | Tax year 2026-27 onwards |
Frequently asked questions
How many days can an NRI stay in India without becoming resident?
If your Indian income (other than foreign-source income) is ₹15 lakh or less, you can stay up to 181 days in a year as a visiting Indian citizen or PIO. If it is above ₹15 lakh, 120 days or more can make you resident when you were also in India for 365 days or more in the four preceding years.
Does NRE interest count towards the ₹15 lakh limit?
The test looks at total income, other than income from foreign sources. Income that is exempt, such as NRE deposit interest for a person who qualifies for that exemption, is not part of total income and so does not count. Taxable NRO interest, rent and capital gains do count.
What is a deemed resident under section 6(1A) or new section 6(7)?
An Indian citizen whose Indian income exceeds ₹15 lakh and who is not liable to tax in any other country because of domicile, residence or a similar criterion. Such a person is resident even with no days in India, but is always treated as not ordinarily resident.
Is an RNOR taxed on salary earned abroad?
Generally no. A not ordinarily resident person is taxed on Indian income and on foreign income only if it comes from a business controlled in India or a profession set up in India. Foreign salary for work done abroad usually stays outside the Indian tax net.
Which law decides my status for FY 2025-26 and for 2026-27?
Residential status for FY 2025-26 (AY 2026-27) is decided under section 6 of the Income-tax Act, 1961. From tax year 2026-27, section 6 of the Income-tax Act, 2025 applies. The tests are the same; the numbering has changed.
Is residential status under FEMA the same as under income tax?
No. FEMA uses a separate test in section 2(v) of FEMA, 1999, based mainly on stay of more than 182 days in the preceding financial year and the purpose of being in or outside India. Bank accounts (NRE, NRO) follow FEMA status, while the ITR follows income-tax status.
Can a DTAA override deemed residence in India?
A treaty's tie-breaker can only apply where you are resident in both countries under their laws. A deemed resident is, by definition, not liable to tax elsewhere by residence, so the tie-breaker usually has nothing to work on.
Related reading
Sources
Income-tax Act, 1961: section 6 (including Explanation 1 and sub-sections (1A) and (6)), as amended by the Finance Act, 2020; Income-tax Act, 2025: section 6(1) to (13); CBDT press release dated 2 February 2020 on the deemed-residence provision; Foreign Exchange Management Act, 1999: section 2(v). Names and figures in the examples are illustrative. Educational content only, reflecting the law as of 1 November 2026; check the current law for your facts.
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